Lending Club Review

In this Lending Club Review we are going to talking about a fairly popular company that you might have heard about recently in the news. Lending Club is the world’s largest online Peer-to-Peer marketplace, facilitating loans, business, and financing for elective medical procedures. Borrowers access lower interest rate loans online. Investors provide the funds to get the loans going in exchange for earning interest. Lending Club operates completely on the web, which means they have no actual branches.  While writing this Lending Club Review, we found that Lending Club believes this dependency on technology is supposed to help the consumer attain a lower interest rate and create a greater experience. Lending Club passes the cost savings to borrowers in the form of lower rates and investors in the form of attractive returns. They claim to be “transforming the banking system” into an easy going, honest and highly efficient online marketplace, helping people achieve their financial goals every single day of the week. Well, recent occurrence would certainly point to otherwise. In this Lending Club Review, Let’s see how they fair against our standards.

 

Trouble in Paradise

Before I jump into the Lending Club Review. I would like to shed some light on what recently went down with Lending Club. Former CEO Renaud Laplanche found himself at a crossroad earlier in the year, when the shares of his very own company, which were listed as collateral for a different loan, drastically dipped in value. While writing this Lending Club Review, we found that Mr. Laplanche attempted to remedy this sticky situation. HE asked Mr. Mack (Former CEO of Morgan Stanley) for a loan. It was later revealed through property records, that Morgan Stanley provided Lending Club with a number of different mortgages.

In writing this Lending Club Review, I found that it was mentioned in a filing by the company that Mr. Laplanche pledged his company stock to secure personal loans. This nugget of information wasn’t disclosed to LendingClub’s board, until he was forced to refinance that debt. From December 9 to January 15, the stake Mr. Laplanche pledged dropped down to $35 million, losing 50% of its value. After Mr. Laplanche was able to obtain the new financing to meet the collateral, he offered the remaining money to his CFO, so that she can refinance her personal loan. Later, she declined to comment on this matter. Hmm, big surprise there.

According to a trust deed filed with California’s Marin County, on February 19, 2016 Mr. Laplanche got $6.51 million worth of a mortgage from Morgan Stanley Private Bank, on the Ross (California) property. Mr. Laplanche purchased a property in Ross, in November last year. The purchase was made through a trust called the Brant Point Trust. Mr. Laplanche moved 4.47 million LC shares to Bran Point on December 9, 2015.

We discovered while putting together this Lending Club Review that Lending Club has been on the hunt for more credible investors, since the resignation of CEO Renaud Laplanche. So that it can finance the loans to individuals, and stay in business. Another nugget that popped up while putting together this Lending Club Review is that Lending Club has been chatting with Citigroup about a possible deal. If all goes well and they seem to strike a deal, Lending Club will work on a number of different deals with the Citigroup. There is a chance that in an attempt to attract more investors, the company might boost their return rates which will increase the pressure on its margins.

Service

Now returning to our regularly scheduled program. I highly doubt that service offered by Lending Club is up to par. Why? Well, because in writing this Lending Club Review I couldn’t seem to find much positive feedback from consumers about their customer service experience. Even the people who really believe in the Lending Club will tell you that they falter when it comes to customer service. The issue I found while writing this Lending Club Review seems to be primarily with their method of contacting consumers. Especially those who might be delinquent on their monthly payments. They seem to borderline haggle consumers with phone calls and emails. I don’t know if this has to do with the fact that they don’t actually have any branches or perhaps this behavior is a result of what has recently transpired with the CEO of Lending Club. Maybe the frantic Execs of Lending Club had a hand in creating a “do whatever is necessary” kind of attitude. Whatever it may be, they certainly need to clean up their act. So far, Lending Club isn’t doing too well in this Lending Club Review.

 

Funding & Time Frame

Lending Club uses “technology” (whatever that means) to operate an online marketplace at a lower cost than a traditional bank loan programs. We learned quite a bit in creating Lending Club Review. There system is supposed to carry the saving on to borrowers in the form of lower rates and to investors in the form of solid returns. Borrowers who used a personal loan via Lending Club to consolidate debt or pay off high interest credit cards report in a survey that the interest rate on their loan was an average of 32% lower than they were paying on their outstanding debt or credit cards. By providing borrowers with better rates, and investors with risk-adjusted returns, Lending Club had at one point the highest satisfaction ratings in the financial services industry. In term of how long it should take to see the funds actually deposited in your account, it should be no more than a few days. Which is pretty standard when you think about it. It really doesn’t get more complicated than that in this Lending Club Review. Fortunately, Lending Club has found a way to actually deliver on their promises in that aspect. That’s one point for Lending Club in this Lending Club Review

 

Fixed Terms & Interest Rates

In this Lending Club Review I’d like to talk about how when people get a loan at Lending Club, they realize their interest rates are somewhat high. This is important to discuss. Say you need a loan for $10,000 and you get approved for a great interest rate of 7%. You would pay $1,150 in interest on a three year loan. However, if your interest rate had a higher rate like 14%, you would pay $2,300 in interest over three years. A good interest rate can save you thousands of dollars. On the same 3 years, you would be paying double! So what’s the deal? In this Lending Club Review I want to talk about why these folks are getting hit with these interest rates that are just ridiculous. I think it all depends on a few things. The first thing is the fixed terms that are offered, the actual range of the interest rates that are available to you as the consumer, and the require that Lending Club has set for approval.

Let’s talk about the APR first. With a maximum of 35% interest, something like 14% is not the worst of the worst. Though it may see that way to you, to Lending Club you’re just one of their customers who landed somewhere in the middle. Which I have to say, really kind of sucks for the person who needs a loan, and then gets screwed over by a company that appeared to be their knight in shining armor.

I’d also like to point out in this Lending Club Review that when it comes to the fixed terms that are available, they are somewhat limited, but not as limited as some other companies I’ve seen. They offer consumers 1-5 year fixed terms. So, I’ll given Lending Club that.

 

Lending Club Requirements

One of the most important part of this Lending Club Review is this part right here.  The requirements or hoops one must jump through in order to get approved with a reasonable rate. There’s four major thing that Lending Club looks for when reviewing an applicant, and four things they don’t want to see. These things affect what kind of deal you’re going to get. It’s crucial that you take a look everything in this Lending Club Review before you decide to jump into bed with this company.

 

What They Look For:

  • 24 months in business
  • At least 75,000 in annual sales
  • No recent Bankruptcies or Tax Liens
  • You own at least 20% of the business and have at least fair or better personal credit

 

 What They Don’t Want To See:

  • Collateral for loans or line under $100k
  • Business Plans or Projections
  • Visits to your Business
  • Costly appraisals or title insurance

 

Conclusion

So where exactly does this put us with Lending Club? They score an accumulative score of 71.6% with us at thebestdebtconsolidationloans.com in this Lending Club Review. To break it down for you, that’s a 63% in service, 74% in funding, 95% in Time Frame, 69% in Approval Rate, and 57% in Terms. Is Lending Club just a brood of vipers? No, of course not. That’s not we want to get across in this Lending Club Review. They are simply a semi-trustworthy company that seem to be going through a rough patch. Should you use their services? I guess I will leave that up to you. All I will say is that there are better more trustworthy companies out there that offer the same service. The facts in this Lending Club Review should definitely point to that.